A New Look at a Great Egalitarian

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Sam
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January 1, 2016 @ 11:50 am
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In our deeply unequal times, historian Edward O’Donnell reminds us, the life of the 19th century’s most important critic of concentrated wealth remains as relevant as ever.

[1]

Henry George, the 19th century’s most celebrated egalitarian, and his new biographer, historian Edward O’Donnell

Back in America’s original Gilded Age, in the decades right after the Civil War, no American spoke and wrote more compellingly against the nation’s growing inequality than Henry George, a Philadelphia-born journalist whose writing career initially took off in San Francisco.

George’s immensely popular 1879 book, Progress and Poverty[2], sold millions of copies, and the reform plan he championed — what become known as the “single tax,” a levy to prevent landowners from deriving any profit from mere ownership — captivated a significant chunk of his generation.

In 1897, at George’s death, over 100,000 people walked past his coffin in New York’s Grand Central Station. Many thousands more marched in his honor after the funeral service. In the 19th century, only Presidents Lincoln and Grant went out amid comparable glory.

What can we today learn from George’s life? Too Much editor Sam Pizzigati put that question — and more — to O’Donnell just before year’s end.

Too Much: Henry George entered his 20s right before the Civil War started. What changes in the distribution of America’s income and wealth would he see over the course of his lifetime?

George’s central message: Extreme inequality will destroy the American republic.

Edward O’Donnell: Beginning in the late 1860s, George began to notice two troubling new trends: concentrated corporate power — or what people in the Gilded Age called “monopoly” — and increased numbers of people living in poverty.

Before this period, businesses in America tended to be small-scale, with fewer than 25 employees. Most also produced goods for local or regional consumption. But after the Civil War, new technology, methods of financing, and forms of corporate management led to the emergence of enormous business enterprises like railroads that employed thousands of workers and conducted business over great stretches of territory.

TM: What drove the new growing inequality?

O’Donnell: Many factors contributed to the growth of inequality. But one particularly important factor had to be the changing nature of work.

New and more efficient industrial technology undermined the value and power of skilled workers, making it easier for employers to hire unskilled labor. These workers had less and less leverage when it came to bargaining for higher wages, allowing employers to keep wages low and to thwart efforts create labor unions.

At the other end of the spectrum, the owners of such business enterprises, along with banks, investors, and speculators, reaped enormous profits. Their rising fortunes, in turn, garnered them unprecedented political influence that allowed them to prevent any efforts to rein in corporate power.

TM: Did the fierce new concentration of wealth more frighten George or anger him?

O’Donnell: I would say the rise of concentrated wealth mostly frightened him.

Left unregulated, George explained, modern capitalism would produce a society of haves and have-nots.

In George’s writings and speeches, you do sense a certain level of indignation over what he saw as a rigged form of industrial capitalism. But most of George’s message came in the form of dire warnings and earnest pleas for radical reform. In essence, George’s central message came down to: Extreme inequality will destroy the American republic. As he wrote in his book, Progress and Poverty:

“In our time, as in times before, creep on the insidious forces that, producing inequality, destroy Liberty . . .It is not enough that men should vote; it is not enough that they should be theoretically equal before the law. They must have liberty to avail themselves of the opportunities and means of life; they must stand on equal terms with reference to the bounty of nature. Either this, or Liberty withdraws her light! Either this, or darkness comes on, and the very forces that progress has evolved turn to powers that work destruction.”

TM: What made George’s policy prescriptions so appealing to people of his time?

O’Donnell: What drew to George such a great following was not so much his specific single-tax reform, but rather his broader message warning of the threat extreme economic inequality posed to democracy.

Modern capitalism had many virtues, George said, but if left unregulated it would produce a society of haves and have-nots — one that resembled Dickensian Europe much more than Jeffersonian America.

Under such conditions, it didn’t matter if all American male citizens possessed the right to vote and were, therefore, politically equal. Republican citizenship, George claimed, had an economic or material dimension as well.

And government, George believed, had the responsibility to establish policies that would prevent the monopolization of wealth and resources by the few and promote the material well-being of the many. This idea would form the basis of progressivism in the early 20th century and beyond.

Government, George believed, had the responsibility to prevent the monopolization of wealth by the few.

TM: Just how popular and influential did Henry George become?

O’Donnell: Few people had ever heard of Henry George when he published his book, Progress and Poverty, in 1879. But within a few years, the book had become an international bestseller, and George had become well-known throughout the United States and Great Britain.

In the United States, working class Americans comprised the greatest portion of his following. Most of them probably did not embrace George’s single tax plan, but they were drawn to his vivid and compelling diagnosis of the problems facing America in the Gilded Age.

In 1886, a year of unprecedented labor unrest, workers in New York City nominated George to run as their labor party candidate for mayor. They conducted an extraordinary and unprecedented campaign, and George nearly won the election. George soon moved away from labor activism — for reasons I detail in my book[3] — but continued to enjoy great popularity among a growing body of single-tax enthusiasts.

George died in 1897, but his books remain in print today in many languages, and dozens of organizations around the world continue to promote his ideas.

TM: You’ve spent a significant part of your life studying Henry George. What drew you to him?

O’Donnell: What interested me about George was his focus on one of the central problems of our day. Modern capitalism does produce tremendous wealth and life-enhancing innovation, but it also has the tendency to generate increased economic inequality.

George also fascinates me because he emerged in the 1880s to play a key role in the national debate over what to do about corporate power and rising inequality.

George made a compelling case for attending to the Common Good.

On one side of that debate stood business leaders and conservatives who insisted that nothing needed to be done. Stick to laissez-faire policy, they argued, and the free market would generate ample wealth and opportunity for all.

On the other end of the spectrum, socialists demanded that capitalism be abandoned in favor of state control of the economy.

George said both sides were wrong. The single tax, he insisted, would restore a fair and just version of capitalism that would reduce inequality and provide opportunity for all to enjoy decent lives as free and independent republican citizens. In many ways, providing this opportunity remains the challenge of our times.

TM: Our current inequality rivals the inequality of Henry George’s day. How much of his basic perspective do you feel remains relevant today?

O’Donnell: I would say George remains relevant in the early 21st century for three reasons. First, George makes a very compelling argument for why extreme inequality threatens democracy. People living in poverty with no opportunity to improve their condition enjoy neither republican liberty nor equality.

Second, George called for breaking free from the tradition of laissez-faire government. That form of government had made sense in 1815 when most Americans lived in small towns and earned their living as farmers. But the advent of modern capitalism required the judicious use of state power to prevent monopoly and protect opportunity.

Third — and here’s the thing that ties all this together — George made a compelling case for attending to the Common Good. He acknowledged that individualism was a key American value, but he made clear that it was not the only value.

Individualism and the Common Good are not mutually exclusive. They operate in tension with one another, with the Common Good, according to George and the progressives who followed him, taking precedence.

[4]This insight is especially important in our times, given the growing popularity of libertarianism and the gospel of radical free marketism.

TM: Anyone in American public life today remind you of Henry George?

O’Donnell: The two most obvious people that come to mind today would be economist Thomas Piketty and politician Bernie Sanders.

Piketty, the author of the bestseller Capital in the 21st Century, presents a warning about the threat inequality poses to democracy that’s strikingly similar to the one George made 135 years ago. Like George, Sanders has garnered a mass following speaking out against the power of big business and Wall Street — and proposing reforms designed to boost the economic well-being of average working Americans.